Growth Economics and Policies

Working Paper No. 2

Growth Economies and Policies: A Fifty-Year Verdict and a Look Ahead

Author: Shahid Yusuf

A scientific and industrial revolution initiated accelerated growth rates in a handful of Western countries starting in the nineteenth century. By the early twentieth century, accelerated growth had spread to economies in Asia, Latin America, and Eastern Europe. With the end of WWII and the subsequent decolonization, rapid growth came to late-starting developing nations as well. As a result of this history, a growth ideology has become firmly entrenched, and growth economics is struggling to expand the toolkit of practical policy options. The purpose of this paper is to study how thinking on growth has evolved since the 1950s through the interplay of international politics, country-level experience, and theorizing almost exclusively conducted in Western countries. The paper considers whether – following the financial crisis and the unsettled circumstances in the first decade of the twenty-first century – economic research based on the experience of a few countries, over a limited time, can provide relevant and effective policy guidance.